TY - JOUR
AU - Berndt,Ernst R.
AU - Cockburn,Iain M.
TI - Price Indexes for Clinical Trial Research: A Feasibility Study
JF - National Bureau of Economic Research Working Paper Series
VL - No. 18918
PY - 2013
Y2 - March 2013
DO - 10.3386/w18918
UR - http://www.nber.org/papers/w18918
L1 - http://www.nber.org/papers/w18918.pdf
N1 - Author contact info:
Ernst R. Berndt
MIT Sloan School of Management
100 Main Street, E62-518
Cambridge, MA 02142
Tel: 617/253-2665
Fax: 617-227-0880
E-Mail: eberndt@mit.edu
Iain M. Cockburn
School of Management
Boston University
595 Commonwealth Ave
Boston, MA 02215
Tel: 617/588-1486
E-Mail: cockburn@bu.edu
AB - We estimate hedonic price indexes for clinical trial research, an important component of biomedical R&D, using a large sample of agreements between trial sponsors and clinical investigators obtained from Medidata Solutions Worldwide Inc. Nominal prices measured as total grant cost per patient rose by a factor of 4.5 between 1989 and 2011, while the NIH Biomedical R&D Price Index (BRDPI) focused on input costs rose only 2.2-fold. Most of the disparity appears to be attributable to changes in the nature and organization of clinical trials: during this period the average number of patients per site fell substantially while "site work effort" more than doubled. After controlling for these changes in the characteristics of investigator agreements using a variety of methods based on hedonic regressions, we find that the estimated rate of inflation in clinical trials costs tracks the BDRPI very closely. Results from this study suggest that it should be feasible for statistical agencies to develop a producer price index for this type of R&D activity, contributing to broader efforts to develop a deflator for contracted R&D services.
ER -